A marketing firm producing costumes is interested in studying consumer behavior in the context of purchase decision of costumes in a specific market. This company is a major player in the costume market that is characterized by intense competition. The company would like to know in particular whether the income level of the consumers (measured as lower, middle, upper middle, and upper class) influences their choice of costume type. They are specifically focused on four types of costumes (funny costumes, scary costumes, clever costumes, and boring costumes).
Addition Rule of Probability
It simply refers to the likelihood of an event taking place whenever the occurrence of an event is uncertain. The probability of a single event can be calculated by dividing the number of successful trials of that event by the total number of trials.
Expected Value
When a large number of trials are performed for any random variable ‘X’, the predicted result is most likely the mean of all the outcomes for the random variable and it is known as expected value also known as expectation. The expected value, also known as the expectation, is denoted by: E(X).
Probability Distributions
Understanding probability is necessary to know the probability distributions. In statistics, probability is how the uncertainty of an event is measured. This event can be anything. The most common examples include tossing a coin, rolling a die, or choosing a card. Each of these events has multiple possibilities. Every such possibility is measured with the help of probability. To be more precise, the probability is used for calculating the occurrence of events that may or may not happen. Probability does not give sure results. Unless the probability of any event is 1, the different outcomes may or may not happen in real life, regardless of how less or how more their probability is.
Basic Probability
The simple definition of probability it is a chance of the occurrence of an event. It is defined in numerical form and the probability value is between 0 to 1. The probability value 0 indicates that there is no chance of that event occurring and the probability value 1 indicates that the event will occur. Sum of the probability value must be 1. The probability value is never a negative number. If it happens, then recheck the calculation.
For the following situations, identify the test you would run to analyze the data:
A marketing firm producing costumes is interested in studying consumer behavior in the context of purchase decision of costumes in a specific market. This company is a major player in the costume market that is characterized by intense competition. The company would like to know in particular whether the income level of the consumers (measured as lower, middle, upper middle, and upper class) influences their choice of costume type. They are specifically focused on four types of costumes (funny costumes, scary costumes, clever costumes, and boring costumes).
a.
Chi-Square Goodness of Fit
b.
Frequencies
c.
d.
Chi-Square of Independence
The investigator is specially interested to test whether the income level of consumers influences their choice of costume type.
The two categories of interest are the “income level” of a person and the “costume type”.
The hypotheses to be tested are:
Null hypothesis:
H0: The income level and costume type are independent.
Alternative hypothesis:
Ha: The income level and costume type are not independent.
Evidently, the study seeks to find whether there is any association between the two categories income level and costume type. In other words, the study aims to test whether these two categories are independent or not.
As the necessary assumptions are considered to be satisfied, the appropriate test to be performed is (d) Chi-square test for independence.
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